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Increasing the Free Flow of Information to Cuba under U.S. Sanctions

New authorizations will increase access to personal communications and telecommunications services

On December 17, President Barack Obama made a : after maintaining a restrictive trade embargo on Cuba for more than 50 years, the United States will begin to 鈥渃hart a new course in our relations with Cuba and to further engage and empower the Cuban people.鈥 The surprise decision generated , garnering both as well as speculation about what, exactly, the changes would mean in the near term. A follow-up last week provided important insight into how the Obama Administration will implement a key piece of its new policy: increasing the free flow of information to, from, and within Cuba. On Friday, the Commerce and Treasury Departments published important changes to the (CARC) and the (EAR), officially authorizing a range of new exports to the small island nation.

The new policy will help open up a vital channel for the Cuban people to connect to the outside world. And the change is a critical piece of a broader U.S. government effort to update comprehensive sanctions to support the free flow of information. This problem has become increasingly acute in the past few years, as outdated sanctions force American companies to block new technologies like communications tools, which can actually play a vital role in enabling citizens to organize and . Last week鈥檚 announcement places U.S. policy toward Cuba on par with Iran in terms of having the clearest and most well-developed authorizations for personal communications tools.

According to Freedom House, Cuba鈥檚 Internet penetration is to be about five percent, one of the lowest rates in the world, due in part to the fact that telecommunications services in Cuba are and extremely limited in their offerings. But U.S. sanctions have also contributed to the problem, making it difficult or impossible for American companies to make their software, services, and hardware available on the island. As part of the initiative 鈥渢o increase Cubans鈥 access to communications and their ability to communicate freely,鈥 the White House released on December 17 indicated that, going forward, U.S. policy toward Cuba will ensure that, among other things:

  • 鈥淭he commercial export of certain items that will contribute to the ability of the Cuban people to communicate with people in the United States and the rest of the world will be authorized. This will include the commercial sale of certain consumer communications devices, related software, applications, hardware, and services, and items for the establishment and update of communications-related systems.鈥
  • 鈥淭elecommunications providers will be allowed to establish the necessary mechanisms, including infrastructure, in Cuba to provide commercial telecommunications and internet services, which will improve telecommunications between the United States and Cuba.鈥

Simply put, the U.S. government will legalize a range of exports to increase access to both personal communications tools and telecommunications services in Cuba going forward. But to understand what the new policy actually means, it鈥檚 helpful to have some context on how technology authorizations have evolved under Cuba sanctions, a relatively new development in the 55-year history of the U.S. embargo.

A brief history of Cuba sanctions and how communications technology has been treated in the past

In 1960, the U.S. imposed a on Cuba aimed at destabilizing the Communist government of Fidel Castro. Since then, U.S. sanctions against Cuba have been among the most comprehensive unilateral sanctions in the world, strictly limiting virtually all commerce and interaction between the two countries despite only 90 miles of water between them. Although the Treasury Department鈥檚 (OFAC) oversees all licensing for the export of goods, financial transactions, bank transfers, and travel for most sanctioned countries, Cuba sanctions are administered by both OFAC and the Commerce Department鈥檚 (BIS), which handles specific licensing for exporting products to Cuba. That means it takes not one but two government agencies to make significant changes to Cuba sanctions, such as authorizing the export of information and communications technologies.

In general, the U.S. government has been in the process of in the past few years to promote the free flow of information and enable ordinary citizens living in sanctioned countries to access vital communications tools. Cuba was included in several of the early policy initiatives that also applied to Iran, Sudan, and Syria 鈥 including the historic 2010 General License that authorized the export of free, publicly available personal communications tools to sanctioned countries. But updates to our Cuba policies have since lagged behind, and the breadth and complexity of the existing legal restrictions imposed on Cuba have continued to create unique challenges for American companies, even compared to the other comprehensive sanctions regimes.

In April 2009, the Obama Administration first the State Department, the Treasury Department, and the Commerce Department to make changes to Cuba sanctions regulations that would enable greater telecommunications links between Cuba and the United States. Those changes included provisions aiming to 鈥渋ncrease the free flow of information to the Cuban people鈥 by authorizing the creation of general licenses for a wide range of activities related to telecommunications services and personal communications. In response, OFAC amended the Cuban Assets Control Regulations, and BIS issued a in September 2009 on 鈥淐onsumer Communications Devices.鈥 The CCD License Exception made it legal to export certain software and commodities, including printers, disk drives, modems, and mobile phones 鈥 although they were subject to a donation requirement because of financial restrictions (meaning that companies could not actually sell their products to Cuba). It was, at the time, an unprecedented move to increase the free flow of information. But in addition to the challenges created by the donation requirement, implementation was further complicated by the fact that authorization was interpreted narrowly and did not include certain hardware required to make the activities feasible 鈥 or appealing to companies trying to operate in Cuba.

Then, in March 2010, OFAC further technology restrictions for Cuba, issuing a historic General License Related to Personal Communications Services that also applied to Cuba as well as Iran and Sudan. This General License the export of Internet-based communications tools such as instant messaging, chat, email, and social network services that were free and publicly available.

As a from the Cuba Study Group predicted in 2010, however, 鈥渢he regulatory changes released by the [Commerce and Treasury] departments to reflect the directives issued by President Obama risk falling short of what is necessary to actually begin establishing greater telecommunications links. The agencies may not have gone far enough in the rule-making process to incentivize American companies to invest in Cuba.鈥 The report noted challenges with the donation requirement in particular, which made commercial export of technologies authorized by the CCD impossible. Indeed, although the 2009 and 2010 policy changes theoretically eased the restrictions on technology, in practice they did little to actually improve access to communications tools, effectively supporting the put in place by the Cuban government. And while the U.S. government has issued and to Iran sanctions policies since 2010 aimed at further the free flow of information, there鈥檚 been little progress on Cuba and tech sanctions until now.

Understanding last week鈥檚 changes to Cuba policy

Last week, the U.S. government took a significant 鈥 and long overdue 鈥 leap forward with respect to increasing the free flow of information 鈥渢o, from, and among the Cuban people.鈥 BIS to eliminate the donation requirement in the 2009 Consumer Communications Devices License Exception, officially authorizing the sale of various products to eligible end users in Cuba. As the new rule explains, the donation requirement 鈥渓imited the incentive to send these items for Cuba,鈥 and removing it will allow commercial sale of a wide range of technologies, including personal computers, mobile phones, TVs, radios, and digital cameras, as well as related software and services. The CCD has also now been updated to reflect how these technologies have changed since 2009. What鈥檚 more, under the newly created License Exception 鈥,鈥 BIS now also allows the export of 鈥渃ertain items for telecommunications, including access to the Internet, use of Internet services, infrastructure creation, and upgrades.鈥 These measures should make it much easier for American companies to offer the Cuban people communications tools, vital software and security updates, antivirus software, and satellite Internet connectivity.

At the same time, OFAC that will help facilitate the processing of authorized transactions with the Cuban people and allow a number of other activities related to telecommunications (as well as financial services, trade, and shipping). These changes will allow U.S. providers to offer Internet and telecommunications services and hardware within Cuba, and to build infrastructure that will increase telecommunications links between the island and the rest of the global network.

Putting the changes in context: broader implications for the Cuban people and the free flow of information in all comprehensively sanctioned countries

It all sounds great 鈥 American companies are now legally allowed to make their products available in Cuba, from McAfee antivirus software to iPhones and tablets. But, as with most changes to U.S. sanctions policy, actual implementation can be a slower and much more difficult process. As Ellery Biddle, a fellow at the Berkman Center for Internet Society and expert on digital culture in Cuba, after President Obama鈥檚 initial announcement, 鈥淭his promising but vague assertion raises a lot of questions.鈥 With sanctions, the devil is often in the details, as we learned when OFAC had to issue a authorizing similar tech exports to Iran in February 2014 鈥 nearly a year after the U.S. government first changed its policy 鈥 in order to clarify apparently unforeseen ambiguities created by the text of the initial license. Simply put, doing business in Cuba may still prove challenging for American companies in the near term, especially with other trade restrictions in still place (which President Obama cannot unravel entirely ).

What鈥檚 more, the U.S. government isn鈥檛 the only one whose policies have been restricting the Cuban people鈥檚 ability to access the Internet. There鈥檚 also the question of and whether the commercial environment within the country will be hospitable enough to invite significant outside investment from American tech and telecommunications companies. As Robert Muse, a DC lawyer with expertise in U.S. laws and expertise related to Cuba, to Scientific American, the Cuban government has traditionally viewed 鈥渃ontrol of media and information as necessary to state security. It seems unlikely that Cuba is going to welcome U.S. telecom infrastructure providers or direct, unmediated broadcasts between the U.S. and the island鈥攁t least for now.鈥 It鈥檚 not clear whether or how the Cuban government will change its tech policies or foreign ownership rules right now to facilitate U.S. entry into the market.

Nonetheless, this policy shift is still significant in the context of both Cuba and the broader trend of carving out exemptions under U.S. sanctions policies to promote the free flow of information and access to vital communications tools. As American products begin to flow into Iran and Cuba, it鈥檚 time for the U.S. government to start working on and Syria.

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Danielle Kehl

Fellow, Open Technology Institute

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Increasing the Free Flow of Information to Cuba under U.S. Sanctions